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Recent Day Communication between ends is facilitated by the development in the area of wired and wireless networks. The end to end devices like mobiles, handheld and palm size PC's have limited capability for computation, display capacity and bandwidth. This augment, for ways for communicating large data files like video, in highly compressed and acceptable quality over the limited available bandwidth. Block matching algorithms is a vital step for achieving the efficient and acceptable compression. The block matching algorithm defines the total computation cost and effective bit budget. Recently fast search algorithm for video coding using Orthogonal Logarithmic Search Algorithm (OSA) has been proposed This paper presents a novel method named as Modified Three steps and Diamond search Block matching Algorithm (MTSSDS) for the block based motion estimation It has been found that from the original Three step Search (3SS/TSS ) and Diamond Search (DS) method, the PSNR value has increased and the computations and thus computation time (faster) has been reduced significantely. The experimental results based on the number of video sequences were presented to demonstrate the advantages of proposed motion estimation technique.